Don't Miss Out On Money Back From the Government

Phone Excise Tax Refund Applies to 2006 Exempt Organization Tax Returns

By Joyce Underwood

In 2006 the IRS agreed that a certain federal excise tax on long distance telephone services was incorrect and agreed to provide a refund to taxpayers of the tax, plus interest, for phone services between 2/28/03 and 8/1/06. Nonprofit organizations are eligible for this refund, which can be requested by filing a refund claim (Form 8913) along with the 2006 Form 990-T.

The available refund is based either on actual tax paid or an amount based upon a specified formula. The refund is capped at either 1% or 2% of total telephone expense based upon the number of employees, and applies to cellular as well as land lines. We suggest you don't miss out on this tax refund. Please consult your tax advisor for assistance.

Joyce Underwood is a senior manager in the Nonprofit Tax practice in BDO Seidman’s Greater Washington, D.C. office. She can be reached at junderwood@bdo.com.